Adrian Orr, the governor of the New Zealand central bank, expressed strong criticism against stablecoins, asserting that they are not a viable substitute for fiat currency and are inherently unstable.
Speaking before a parliamentary finance committee on Feb. 12, Orr described stablecoins as “the biggest misnomers” and “oxymorons.” He emphasized the Reserve Bank of New Zealand’s (RBNZ) critical concerns regarding decentralized digital currencies and stablecoins.
Orr highlighted the inadequacies of stablecoins, stating that they lack the stability and credibility provided by fiat currencies. He pointed out that while fiat currencies like the New Zealand dollar are backed by parliament and maintained by independent central banks, stablecoins lack such institutional support.
Additionally, Orr commented on Bitcoin, stating that it does not function effectively as a means of exchange, store of value, or unit of account. He emphasized that attempting to use Bitcoin for these purposes is problematic.
Orr noted the importance of regulatory oversight on stablecoins and cited the United Kingdom as a jurisdiction that has taken significant regulatory measures in this regard.
In August 2023, a parliamentary report advised against hasty regulation of cryptocurrencies in New Zealand. The report recommended providing coherent and consistent guidance on the treatment of digital assets under existing laws.
New Zealand is currently exploring options for the design of a central bank digital currency (CBDC) and assessing its costs and benefits, according to a July 2023 report. This indicates the country’s ongoing efforts to adapt to the changing landscape of digital currencies while maintaining regulatory prudence.
Get $200 Free Bitcoins every hour! No Deposit No Credit Card required. Sign Up